US Federal Reserve Board Seeks Comment on Facilitating Faster Payments

The U.S. Board of Governors of the Federal Reserve System published a notice and request for comment with respect to potential measures that could be taken to improve the efficiency and speed of payment services, specifically regarding the facilitation of real-time interbank settlement of “faster payments”—a term generally used to convey a future payment and settlement system that is fast, convenient and accessible.  The notice highlights that while traditional payment methods, such as checks, ACH payments, and credit card transactions have created a payment systems infrastructure that is universal, safe and reliable, this does not necessarily translate into speed and efficiency.  The notice suggests that the current system has resulted in a gap between the speed and efficiency of the payment systems infrastructure and user expectations.  The notice provides background regarding Federal Reserve Board initiatives associated with faster payments, including its Strategies for Improving the U.S. Payment System initiative and Faster Payments Task Force, provides an overview of the faster payments construct, and introduces potential faster payment models, including deferred net settlement of interbank obligations and real-time gross settlement of interbank obligations.  The notice also discusses potential actions that the Federal Reserve Board could undertake to support faster payments, including the development of “24x7x365” real-time interbank settlement and the creation of a liquidly management tool to help promote, support and drive participation in real-time interbank settlement.

View full text of the request for comments.